Illegal Income/Self Incrimination (NOT A TAX PROTEST THREAD!!!!)

"D. Stussy" <kd6lvw[at]bde-arc.ampr.org> wrote:

- quote -

> To me, "FALSE" means not true - i.e. an OVERT statement of
> something OTHER thatn the truth. An omission cannot ever be
> false.
> In that case, the statement was affirming that the return
> was COMPLETE, for which an omission makes it incomplete.
> Again, incomplete in itself isn't false. It was the
> affirmation of completeness that was false, not the omission
> itself.

Reminds me of a guy that got indicted for perjury. During a
trial he was on the witness stand. An attorney read a
written statement that the guy had either written or agreed
to earlier. When he was done the attorney asked, "Is that
your testimony?" To which the guy said, "Yes."

Turned out what was in the statement was a lie. But on
appeal the court said that the guy didn't actually tell a
lie under oath. He said that was his testimony, but wasn't
ever asked if it was true.

Stu

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Arthur L. Rubin <ronnirubin[at]sprintmail.com> wrote:

- quote -

> That strikes me as not reporting
> accurately on the return.

I agree, especially if "gross" income is thereby materially
distorted. Still, the procedure described is common
practice.

MTW

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To me, "FALSE" means not true - i.e. an OVERT statement of
something OTHER thatn the truth. An omission cannot ever be
false.

In that case, the statement was affirming that the return
was COMPLETE, for which an omission makes it incomplete.
Again, incomplete in itself isn't false. It was the
affirmation of completeness that was false, not the omission
itself.

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Seth Breidbart wrote:
- quote -

> Arthur L. Rubin <ronnirubin[at]sprintmail.com> wrote:

> > What I was thinking about is lying on the "occupation" line
> > (should not affect ANY LINE on the return), or more
> > complicated misstatements about including a 1099-MISC as
> > "gross receipts" on schedule C, when, in fact, you didn't
> > receive it.

> Didn't receive which, the 1099-MISC or the income?

The income.

Many of the experts here have recommended that, if you
receive a 1099, but correctly report the income in an
earlier or later year, or never receive the income, you
should include it in "gross receipts" and back it out
elsewhere on Schedule C. That strikes me as not reporting
accurately on the return.

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Neill Massello wrote:
- quote -

> Harlan Lunsford <lunstax[at]bellsouth.net> wrote:

> > Thus an accountant one year might be a salesman on April
> > 15th. (Am I kidding? from accountant to .. salesman???)

> How about lion tamer?

"line tamer".

C$,
HL

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Harlan Lunsford <hlunsfordns[at]bellsouth.net> wrote:

- quote -

> When one prepares his tax return and puts down occupation,
> it should be the occupation one is in at the time he signs,
> and not his occupation on December 31st. Or at least
> that's what I've always heard and followed.

I always thought it was my primary (however that's defined)
occupation during the year I'm filing for. An investment
banker reporting several million $ is just doing well; but
when the pressure gets to him and he retires to take up his
real love of guitar playing, a musician nobody ever heard of
showing an income in the $millions is going to look rather
strange.

Seth

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Harlan Lunsford <lunstax[at]bellsouth.net> wrote:

- quote -

> Thus an accountant one year might be a salesman on April
> 15th. (Am I kidding? from accountant to .. salesman???)

How about lion tamer?

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:

- quote -

> ...
> What I was thinking about is lying on the "occupation" line
> (should not affect ANY LINE on the return), or more
> complicated misstatements about including a 1099-MISC as
> "gross receipts" on schedule C, when, in fact, you didn't
> receive it.

As soon as you use the word "lying" or even "fibbing," I
believe the correct answer here is that doing anything which
can violate a criminal statute - tax or otherwise, as feds
have the whole general criminal code available to them
within limits -- is not wise, unless one really knows that
chance of prosecution is extremely remote. Under law,
whether the falsehood on a document signed under a perjury
jurat has a demonstrable effect on tax liability is well
settled as not the central issue.

Fed prosecutors have enormous power to charge crimes which
seemingly didn't harm the fed gov't all that much. Consider
mail or wire fraud, where one legal-scholarly paper
describes the fed attitude toward this tactic as "...our
Stradivarius, our Colt 45, our Louisville Slugger, our
Cuisinart - and our true love." (Rakoff, "The Federal Mail
Fraud Statute"). And where one appellate circuit remarked
in dissent that it leaves juries "free to apply a legal
standard which amounts to little more than the rhetoric of
sixth grade civics classes."

In the past, I have met with various prosecutors on the same
side of the table, local and fed. As to the latter, I got
the clear impression you definitely don't want that to be an
adversarial conference and you the potential defendant.
Despite seemingly genuinely nice people, they're also really
good at their craft. In reality those folks (and IRS) have
much better things to do beyond even the Martha Stewarts of
our world, but if it's just a matter of good-faith answers
to simple questions on a tax form.....

Fred F.

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Arthur L. Rubin <ronnirubin[at]sprintmail.com> wrote:

- quote -

> What I was thinking about is lying on the "occupation" line
> (should not affect ANY LINE on the return), or more
> complicated misstatements about including a 1099-MISC as
> "gross receipts" on schedule C, when, in fact, you didn't
> receive it.

Didn't receive which, the 1099-MISC or the income?

If you got the income, but no 1099-MISC, and reported the
income properly, is there a problem? (Maybe you had a lot
of $500 clients rather than one $5,000 client.)

Seth

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TaxSrv wrote:
- quote -

> "Gene E. Utterback, EA" wrote:

> > I have no evidence to support this, it is just my gut
> > feeling based on 20+ years as a tax pro - I believe, but
> > can't prove, that the IRS (intends to) profiles returns
> > based on certain information provided on the face of the
> > return using the old DIF scoring system. For example, the
> > IRS computers sort returns into categories based on age,
> > geographic region, & occupation, then they use this
> > information to compile proforma returns to which all returns
> > are (or should be) compared.

> I know it sounds logical and workable, but it's not. One
> hint is that unlike Sch C, IRS doesn't ask for industry
> classification code for occupation on Page 2 of 1040.
> Statistical compliance data (TCMP and its successors) can't
> be broken down into subsets. Even dividing the TCMP pie
> into a few geographic regions makes it useless due to small
> sample size.

> > Additionally, I also believe that there are certain specific
> > occupations that cause returns to undergo more strenuous
> > scrutiny. These are jobs that are especially prone to high
> > amounts of cash transactions - like skycap, waitress,
> > bartender, attorney, etc.

> That's a natural consequence of human screening of returns
> by experienced examiners. However, a vague or blank entry
> can mean that same person may be more likely to select it
> for audit.

You know, here's something that nobody has mentioned yet.

When one prepares his tax return and puts down occupation,
it should be the occupation one is in at the time he signs,
and not his occupation on December 31st. Or at least
that's what I've always heard and followed.

Thus an accountant one year might be a salesman on April
15th. (Am I kidding? from accountant to .. salesman???)

Cheer$,
Harlan Lunsford, EA n LA

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D. Stussy wrote:

- quote -

> Simple: Omitted information is not FALSE information.

I have to disagree. Omitting a material fact renders false
a statement signed under penalty of perjury: United States
v. Cohen, 544 F.2d 781, Siravo v. United States, 377 F.2d
469, United States v. Young, 804 F.2d 116. One of these
cases involves a cash asset omitted from an Officer in
Compromise. Two of them are cited in DOJ's sample jury
instructions for a 7206 criminal tax charge.

Fred F.

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TaxSrv wrote:
- quote -

> Arthur L. Rubin wrote:

> > In court, a lie under oath has to be relevant to be
> > "perjury". Does that apply to documents signed "under
> > penalty of perjury"?

> I believe that the perjury "jurat" better allows for
> prosecution for omissions of items requested on a return,
> like income.

What I was thinking about is lying on the "occupation" line
(should not affect ANY LINE on the return), or more
complicated misstatements about including a 1099-MISC as
"gross receipts" on schedule C, when, in fact, you didn't
receive it.

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TaxSrv wrote:
- quote -

> Arthur L. Rubin wrote:

> > In court, a lie under oath has to be relevant to be
> > "perjury". Does that apply to documents signed "under
> > penalty of perjury"?

> I believe that the perjury "jurat" better allows for
> prosecution for omissions of items requested on a return,
> like income. Without it, a false return becomes only a false
> statement, which except for misdemeanor section 7207 is
> generally not a crime as to what's not there. In a tax
> fraud case, gov't may choose between 7201 tax evasion or
> 7206 false return (perjury). The latter is a shorter prison
> sentence, but the rules for what it must prove are relaxed a
> bit.
> While 7201 tax evasion does not require signature under
> penalty of perjury and certainly includes omissions, 7206
> false return prosecutions are common also, not as a matter
> of just perjury, but because the facts of a particular case
> can result in lesser hazards at trial on the issue of
> intent. Or just the more practical way to do it: A false
> partnership return cannot by itself evade any tax.

Note also that 7206 requires the filing of a return while
7201 does not.

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GarySport wrote:
- quote -

> MTW wrote concerning the occupation field on Form 1040:

> > I wouldn't list an occupation that was clearly false.
> > However, for the past year or two I have left this field
> > blank on all the returns I've prepared, and no adverse
> > consequences have resulted (yet).
> > > Note that the form instructions do not explicitly require
> > you to provide this information, nor is there any
> > discussion as to how to respond. {snip} My point is, there
> > is no guidance as to ~how~ to respond; therefore, I don't.

> Other responses in this thread seem to agree with you. My
> question is why is keeping the occupation "vague" or blank
> in the taxpayer's best interest. Is this to keep from
> attracting untoward scrutiny due to particular occupations?
> I'm a retired professional, but in my retirement from my
> trained field I have a very small part-time business out of
> my home unrelated to my previous profession; it shows a
> minimal profit each year. So I could conceivably list this
> as my occupation, or I presume I could also say "Retired" or
> the vague term "Professional" or even "Retired
> Professional". Any recommendations?

Simple: Omitted information is not FALSE information.

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Harlan Lunsford wrote:
- quote -

> Michael T Wing CPA wrote:
> > sheesh3[at]yahoo.com <sheesh3[at]yahoo.com> wrote:

> > > Is it a crime to list the wrong occupation on a return? (or
> > > to list Unemployed or Hobbyist?)

> > I wouldn't list an occupation that was clearly false.
> > However, for the past year or two I have left this field
> > blank on all the returns I've prepared, and no adverse
> > consequences have resulted (yet).
> > > Note that the form instructions do not explicitly require
> > you to provide this information, nor is there any
> > discussion as to how to respond. For example, how should
> > *I* respond? Should I say
> > > "self-employed" (that best describes my tax situation). Or,
> > should I say "CPA" (that's how I'm licensed). Or, should I say
> > "tax preparer" (that best describes what I actually do). Or maybe
> > "computer operator" ... My point is, there is no guidance as to
> > ~how~ to respond; therefore, I don't. <g
> To add a thought or two....
> "self employed" is not an occupation, just as "housewife"
> or "retired" is not an occupation.
> CPA, EA, etc, are not occupations either, but titles.
> I usually put down "accountant" as an all inclusive term,
> since I do everything here at my office. And I do mean
> everything, even being a father confessor and psychologist
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

.....So where's the CPA's/EA's tax exempt status as a
"religious organization?" ;-)

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TaxSrv <n3_eu[at]comcast.net> wrote:

- quote -

> It's not in the taxpayer's best interest. In a simple
> example, what criteria would IRS then use to decide if just
> 15,000 employee business miles appears high? In some
> occupations it's common if not low; in many others it can
> range from questionable to ludicrous. So, select it for
> audit. Consider also where business address is entered on
> Schedule C. It logically can serve no other purpose than
> placing the reported income/expense line items in further
> context beyond reported nature of the business. IRS actually
> hates no-change audits; subtle tax return details help them
> do that.

My comments are limited to what to enter (or not) in the
signature block of Form 1040. Entries on Form 2106 or
Schedule C are a different issue.

MTW

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"Gene E. Utterback, EA" wrote:

- quote -

> I have no evidence to support this, it is just my gut
> feeling based on 20+ years as a tax pro - I believe, but
> can't prove, that the IRS (intends to) profiles returns
> based on certain information provided on the face of the
> return using the old DIF scoring system. For example, the
> IRS computers sort returns into categories based on age,
> geographic region, & occupation, then they use this
> information to compile proforma returns to which all returns
> are (or should be) compared.

I know it sounds logical and workable, but it's not. One
hint is that unlike Sch C, IRS doesn't ask for industry
classification code for occupation on Page 2 of 1040.
Statistical compliance data (TCMP and its successors) can't
be broken down into subsets. Even dividing the TCMP pie
into a few geographic regions makes it useless due to small
sample size.

- quote -

> Additionally, I also believe that there are certain specific
> occupations that cause returns to undergo more strenuous
> scrutiny. These are jobs that are especially prone to high
> amounts of cash transactions - like skycap, waitress,
> bartender, attorney, etc.

That's a natural consequence of human screening of returns
by experienced examiners. However, a vague or blank entry
can mean that same person may be more likely to select it
for audit.

Fred F.

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Arthur L. Rubin wrote:

- quote -

> In court, a lie under oath has to be relevant to be
> "perjury". Does that apply to documents signed "under
> penalty of perjury"?

I believe that the perjury "jurat" better allows for
prosecution for omissions of items requested on a return,
like income. Without it, a false return becomes only a false
statement, which except for misdemeanor section 7207 is
generally not a crime as to what's not there. In a tax
fraud case, gov't may choose between 7201 tax evasion or
7206 false return (perjury). The latter is a shorter prison
sentence, but the rules for what it must prove are relaxed a
bit.

While 7201 tax evasion does not require signature under
penalty of perjury and certainly includes omissions, 7206
false return prosecutions are common also, not as a matter
of just perjury, but because the facts of a particular case
can result in lesser hazards at trial on the issue of
intent. Or just the more practical way to do it: A false
partnership return cannot by itself evade any tax.

Fred F.

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GarySport wrote:

- quote -

> My question is why is keeping the occupation "vague" or
> blank in the taxpayer's best interest.

It's not in the taxpayer's best interest. In a simple
example, what criteria would IRS then use to decide if just
15,000 employee business miles appears high? In some
occupations it's common if not low; in many others it can
range from questionable to ludicrous. So, select it for
audit. Consider also where business address is entered on
Schedule C. It logically can serve no other purpose than
placing the reported income/expense line items in further
context beyond reported nature of the business. IRS actually
hates no-change audits; subtle tax return details help them
do that.

Fred F.

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Dan Evans wrote:

- quote -

> It could be perjury, but probably shouldn't be a tax crime
> because it doesn't evade or hinder the administration of any
> tax.

In court, a lie under oath has to be relevant to be
"perjury". Does that apply to documents signed "under
penalty of perjury"?

(This is a legal question, rather than a tax question, even
though I can think of few documents other than tax returns
signed "under penalty of perjury".

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